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Mandolina Mandolina
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7 years ago
Which of the following depicts the process by which an increase in the money supply will lead to an increase in GDP?
A) The increase in the money supply will drive up the interest rate, which will lower government spending and reduce the level of equilibrium GDP.
B) The increase in the money supply will directly increase consumption spending by households, which will increase the level of equilibrium GDP.
C) The increase in the money supply will directly increase the level of government spending, which will increase the level of equilibrium GDP.
D) The increase in the money supply will reduce the interest rate, which will increase the level of consumption and investment spending and cause equilibrium GDP to rise.
E) The increase in the money supply will increase the amount of paper currency in circulation, which will increase the rate at which people spend and cause equilibrium GDP to rise.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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hecosmetichecosmetic
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Mandolina Author
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#2
7 years ago
Wwow, couldn't thank you enough
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